The changes we have seen in the retail industry within the last decade have been remarkable. The sector has seen double digit growth thanks to a rise in the middle-class in many African countries.
Technology has played a big role in shaping expectations. The internet has collapsed the world into a global village and the influence of first-world countries is intense. Burgeoning malls, consumerism and a preference for brands or quality over price are some of the visible signs.
Though the well educated and affluent African consumer is an attractive target for most brands, the real opportunity lies in unlocking the needs of the masses. For this, we shall explore in a different series what markets are developing; driven by which consumers; what scale of opportunity they represent and what the unmet needs are in this shifting market place.
The increased purchasing power of African consumers means that they are looking beyond basics, not just in the products they purchase but also in the shopping experience. An example of this shift is the growing number of people who now purchase vegetables from the fresh section of supermarkets. Not long ago, the corner vegetable vendor was the primary source. The retail industry is moving with the times as more stores aspire to become destinations and not just functional spaces to transact sales.
The benefits of progress do not stop at the consumer. Businesses in the retail space have also gained more. Retailers can now access better ways to improve their businesses. Technology has played a role in formalizing and enhancing sales. Digital tools now grant direct access to suppliers for products, without relying on middlemen.
With the Covid-19 pandemic disrupting how businesses operate, the retail sector will have to adapt fast by leveraging technology to adapt to a ‘new normal’ where consumers will integrate technology in their process to obtain crucial supplies.
We researched on some emerging trends which will be explored more this decade
Online shopping has been a common trend for a while now, as it benefits both the customer and the business. The shop owner needs not incur the overhead of running a brick and mortar store and the customer benefits from the convenience and quick delivery.
Over time, as more customers discover and rely on ecommerce, brands are realizing they might lose market share if they do not diversify their channels. With the expansion of direct-to-consumer (D2C) in recent years, brands can sell straight to the consumer, forgoing traditional stores and middlemen altogether. This has redefined the relationship between brands and their loyal customers, particularly younger, digitally savvy consumers.
Despite the allure and convenience of online shopping, most purchasing particularly in Africa still happens in physical stores. Not to be left behind, brick and mortar stores have integrated ecommerce strategies to expand their reach and capitalize on emerging opportunities. This has been possible thanks to a growing footprint of logistics partners who handle fulfilment.
2.Partnerships between Retail Outlets and Tech Logistics Companies
As consumers stay home to avoid exposure to infection from Covid-19, retailers have to look for ways to reach them at their point of need. Many big chain stores are partnering with tech logistic companies to ensure that consumers still have their groceries needs met e.g. Naivas and Glovo etc. The partnerships formed during this period will likely be sustained as consumers move to online ordering platforms after experiencing convenience during this period.
3.Stores within Stores
The best example is a beauty salon that hosts several hairdressers renting space within it, while dedicating space for jewellery and makeup for sale. This helps in upselling complementary products and small retailers are exposed to foot traffic from larger stores.
Shop owners have invested heavily in visual merchandising so that the products look very appealing and also customers can see the products both from inside and outside the shop. The influence of social media sites such as pinterest has played a key role in this trend.
5.Use of Retail Software
Use of softwares such as RetailPay has helped retailers in several ways including accounting for their stock, tracking the location of their products at all times and the major benefit of having their products insured.
Additionally, we will see the use of software that can help optimize orders and fulfillment management as retailers look for more efficient ways to place and fulfil orders while ensuring they remain with optimum levels of products in store and in their stores/warehouses.
6.Facial Recognition Technology
Many developed nations, particularly China, are experimenting with novel ways technology can be integrated into the retail experience. Facial-recognition technology is one of them. Though the privacy implications raise several eyebrows, it takes personalization to a whole new level since you can gather specific data, like a person’s mood through their facial expressions.
Another area is self-checkout, which unlike traditional methods that rely on cashiers to process purchases, the self-checkout allows a customer to process their own payments by scanning products and making the payment by themselves.
According to a survey done by Consumer Reports, 75% of people said they appreciate the self-service checkout because it is fast and easy to use, therefore saving them on time. These checkouts also allow one cashier to manage several lines simultaneously.